Walmart is optimizing its retail operations to improve profitability. The COGS structure includes costs of goods purchased, direct labor costs, and allocated portions of store operating expenses. For the current fiscal quarter:

Requirements:

• Calculate the COGS using the formula: COGS = Cost of Goods Purchased + Direct Labor + Allocated Store Operating Expenses.
• Present a COGS table detailing the costs for each component.
• Recommend strategies to reduce COGS, such as implementing JIT inventory systems and optimizing supply chain logistics.
• Explain how reducing COGS aligns with Lean retail principles.
• Provide a numerical example with hypothetical values demonstrating the calculation of COGS and potential cost savings.

COGS Table:

Category	Amount ($)
Cost of Goods Purchased	A
Direct Labor	B
Allocated Operating Costs	C
Total COGS	A + B + C

Numerical Example:

• Cost of Goods Purchased: $10,000,000
• Direct Labor: $2,000,000
• Allocated Operating Costs: $1,500,000
• COGS = $10,000,000 + $2,000,000 + $1,500,000 = $13,500,000

Walmart aims to reduce COGS by 15% through operational efficiencies, potentially saving $2,025,000 annually.